Memorandum-to-the-Prime-Minister-on-Unaffordable-Housing

Appendix 9 -
The flow of development land -
how not <strong>to</strong> do it
(Peter Ambrose)
The problem of managing <strong>the</strong> flow of development land in such a way that competing interests, both financial
and conservational, are balanced has not been effectively solved.Three case studies - one an international
comparative study of development in ‘growth’ regions, one of inner city regeneration and one of development
on an urban fringe - will illustrate how <strong>the</strong> UK system of development land supply fails <strong>to</strong> achieve cost-effective
and distributively fair solutions. Appendix 16 will discuss a range of better solutions.
Case Study 1 - Housing development in growth regions
In <strong>the</strong> late 1980s a comparative study, funded by ESRC and Swedish Building Institute grants, was carried out by
researchers at <strong>the</strong> Centre for Urban and Regional Studies at <strong>the</strong> University of Sussex in collaboration with
researchers at <strong>the</strong> University of Örebro.The aim was <strong>to</strong> establish which of three national land supply and
housing provision systems, those of France, Sweden and <strong>the</strong> UK, responded best <strong>to</strong> <strong>the</strong> pressures created by
rapid sub-regional employment growth.The four areas selected for study were a group of nine communes in
<strong>the</strong> E4 corridor between S<strong>to</strong>ckholm and Uppsala, a group of municipalities <strong>to</strong> <strong>the</strong> south west of Paris, <strong>the</strong>
metropolitan area of Toulouse and <strong>the</strong> county of Berkshire.
All <strong>the</strong>se areas were experiencing rapid employment growth in ‘high-tech’ manufacturing, financial and
producer services and research and development activities.They were drawing in new workers, many of <strong>the</strong>m
highly qualified and highly paid, and <strong>the</strong>re were consequent pressures on <strong>the</strong> existing housing s<strong>to</strong>ck, much of
which was not of ‘executive’ standard (<strong>the</strong> study is fully written up in a number of works including Barlow,
Ambrose and Duncan 1988, Danermark and Vinterheimer, 1991, Barlow and Duncan 1992, Barlow 1993 and
Ambrose 1994, Chapter 10).
The areas were compared in terms of a number of indica<strong>to</strong>rs such as <strong>the</strong> rate of new output, <strong>the</strong> range and
tenure balance of housing produced (so that <strong>the</strong> needs of low income as well as high income workers were met)
and <strong>the</strong> inflationary effects noted both on house prices and land prices.
At <strong>the</strong> heart of <strong>the</strong> Swedish system at this time was <strong>the</strong> State Housing Loan arrangements which provided
construction finance at preferential rates if builders worked <strong>to</strong> <strong>the</strong> housing requirements laid down by <strong>the</strong>
communes and within specified cost limits.The communes <strong>the</strong>mselves were effectively <strong>the</strong> monopoly providers
of land for development since <strong>the</strong>y had powers <strong>to</strong> acquire land for this purpose at very close <strong>to</strong> existing use
value.The Swedish construction industry had been found from previous research (Dickens et al. 1985 and
Duncan 1986) <strong>to</strong> be more cost-effective than that in <strong>the</strong> UK.This earlier work had established that in Sweden
construc<strong>to</strong>rs competed largely on construction quality and innovation whereas in <strong>the</strong> UK more profit was <strong>to</strong> be
made from land holding and speculation so less was invested in actual construction improvements and
productivity.
Zacchaeus 2000 Trust - <strong>Memorandum</strong> <strong>to</strong> <strong>the</strong> <strong>Prime</strong> <strong>Minister</strong> - May 2005 57